A Company That Uses the Net Method of Recording Purchases

question 6

Multiple Choice

A company that uses the net method of recording purchases made a purchase of $400 with terms of 2/10,n/30.The entry to record the purchase would be:

• A)Debit Merchandise Inventory $392;credit Accounts Payable $392.
• B)Debit Merchandise Inventory $400;credit Discounts Lost $8;credit Accounts Payable $392.
• C)Debit Merchandise Inventory $392;credit Cash for $392.
• D)Debit Merchandise Inventory $392;debit Discounts Lost $8;credit Accounts Payable $400.
• E)Debit Accounts Payable $400;credit Discounts Lost $8;credit Cash $392.

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Definitions:

Granite

Granite is a coarse-grained igneous rock comprised mainly of quartz, feldspar, and mica, known for its strength and widely used in construction and monuments.

Surface Area

The total area that the surface of an object occupies.

Fractured

Broken or cracked, often referring to rocks or geological features that have been subjected to stress leading to breakage.

Exposed Rock

Areas where bedrock is visible at the Earth’s surface, not covered by soil, vegetation, or water.